Peretz earns $5,475 per month. He has monthly expenses of $2,134 excluding rent. He does not want his rent to exceed 25% of his monthly income. What is the max amount he is willing to spend on rent each month?

The rent limit is 25% of Peretz’s monthly income, so calculate 0.25 × $5,475 = $1,368.75. His other monthly expenses do not change the stated rent limit. The maximum amount he is willing to spend on rent is $1,368.75, choice B.

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